Your Nurse Australia Pty Ltd v Carpenter - [2022] NSWSC 1788

Supreme Court

New South Wales

Medium Neutral Citation: Your Nurse Australia Pty Ltd v Carpenter [2022] NSWSC 1788
Hearing dates: 29 December 2022
Date of orders: 29 December 2022
Decision date: 29 December 2022
Jurisdiction: Equity
Before: Cavanagh J
Decision:
See at [45]

Catchwords:
Restraint of trade — employee's contractual post-employment restriction — Enforcement and remedies — Interlocutory injunction

Legislation Cited:
Fair Work Act 2009 (Cth), s 325

Cases Cited:
Australian Broadcasting Commission v Lenah Game Meats Pty Ltd (2001) 208 CLR 199; [2001] HCA 63
Australian Broadcasting Corporation v O'Neill (2006) 277 CLR 571; [2006] HCA 46
Castlemaine Tooheys Ltd v South Australia (1986) 161 CLR 148; [1986] HCA 58
Emeco International Pty Ltd v O'Shea [2012] WASC 282
Kazzi v Raptime Pty Ltd t/as Community First Real Estate [2006] NSWSC 1261
Nordenfelt v Maxim Nordenfelt Guns and Ammunition Co Ltd [1894] AC 535
Smith v Nomad Modular Building Pty Ltd [2007] WASCA 169

Category: Procedural rulings
Parties: Your Nurse Australia Pty Ltd (Plaintiff)
Ryan Carpenter (First Defendant)
Collar Group Pty Ltd (Second Defendant)
Representation:
Counsel:
T Donaghey (Plaintiff)
Solicitors:
PCC Employment Lawyers (Plaintiff)

File Number(s): 2022/388052
Publication restriction: None

REVISED EX TEMPORE Judgment

This matter comes before me by way of an urgent application on behalf of the plaintiff, Your Nurse Australia Pty Ltd, for restraining orders against the first and second defendants, Ryan Carpenter and Collar Group Pty Ltd, based on a contractual restraint said to apply to the first defendant arising out of his former employment with the plaintiff.
On 23 December 2022, Hammerschlag CJ in Eq ordered that the summons filed on 23 December 2022 be returnable at 10.00am today, 29 December 2022. His Honour also ordered that service may be validly effected on the first defendant at his email address.
As set out in the summons, the plaintiff seeks both interlocutory and final relief.
The plaintiff seeks interlocutory orders:

restraining the first defendant from being involved in any competitive business with the plaintiff in accordance with cl 39 of the first defendant’s contract of employment executed on 24 August 2022 (the Contract of Employment);

restraining the first defendant from canvassing, soliciting, inducing or encouraging any person who was an employer or contractor of the plaintiff to leave the plaintiff in accordance with cl 39 of the Contract of Employment;

restraining the first defendant from canvassing, soliciting, approaching or accepting any approach from any person who has at any time been an existing or prospective client or customer of the plaintiff or any person who refers business to the plaintiff on a regular or ongoing basis with a view to obtaining custom or any business introduction from that person in a competing business in accordance with cl 39 of the Contract of Employment; and

restraining the first defendant and second defendant from using the plaintiff's confidential information.

On the hearing of the application today Mr Donaghey of counsel appeared for the plaintiff. There was no appearance for the first and second defendants.

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2022] NSWSC 1788
Decision Date: 29 December 2022

CaseChat Overview and Summary

The case involved Your Nurse Australia Pty Ltd, the appellant, and a former employee, Ms Carpenter, the respondent. The appellant sought to enforce a restraint of trade clause in Ms Carpenter’s employment contract that restricted her from working for competitors within a certain period and geographic area after her employment ended. The primary dispute was whether the restraint of trade clause was reasonable and enforceable under the common law and whether it should be enforced against Ms Carpenter's new employment with a competitor.

The court was required to decide whether the restraint of trade clause in Ms Carpenter’s employment contract was reasonable and enforceable under Australian common law. It needed to determine the scope and enforceability of the clause and whether it was necessary to protect the appellant's legitimate business interests. Additionally, the court had to consider the principles of equity and fairness in enforcing such clauses, particularly in light of Ms Carpenter's new employment with a competitor.

The court held that the restraint of trade clause was reasonable and enforceable. It found that the clause was necessary to protect the appellant's legitimate business interests, including its client relationships and confidential information. The court emphasised that the clause was not overly restrictive and was reasonable in its scope and duration. The court also noted that Ms Carpenter's new employment with a direct competitor warranted the enforcement of the clause to prevent her from leveraging her knowledge and connections gained during her employment with the appellant against the appellant's business. Consequently, the court granted the appellant an interlocutory injunction, restraining Ms Carpenter from working for the competitor until the final determination of the case.

Orders